Insights from Sharon Nsule, Business Operations Support, Smart Lab: Facts about Launching a Startup

Launching a startup requires time, dedication, and a lot of capital, and unfortunately, many businesses
do not make it that far.  If you are a business owner especially a Startup perhaps you can learn something from these facts to help your startup succeed.


Fact #1. Fail, Fail and Fail – 90% Of Them Fail


A study by CBI Insights showed that 9 out of 10 new startups fail, mostly because they have not done
market research before they launch their product or service. In fact, 42% in a poll listed the reason for
failure as no market demand for their business. Others listed self-destruction in the form of mediocre or
subpar management and, 72% found that their intellectual property was not a competitive advantage
after they started operating as a business. Most startups also need between 2 and 3 times longer to
validate their market than most founders expect. If you are thinking of starting a business, you can
combat this issue by spending extra time on market research and validation. Even seeking out mentors
through business seed programs, learning how to track performance metrics, and learning about growth
in advance can help you to see as much as 3.5x the growth.

Fact #2. There Are Three New Startups Every Second


3 new startups launch globally every second, making up for 11,000 per hour, or 25,9200 per day! In the
U.S. alone, that number is much lower and usually averages at 3 per minute. With that in mind, you should know it's not just you trying to make it. 

Fact #3. Entrepreneurs Start Out Working for Other People


The Harvard Business Review showed that approximately 70% of investors started out by incubating
their business ideas while working at a traditional job. The data revealed that many entrepreneurs
started their own business in order to get away from bad leadership, but most often took the time to
thoroughly plan out and create a business plan to gain funding before quitting their day job.

Fact #4. Most Aren’t That Concerned with Equity Split


Dividing up money seems like it would be a big deal, but 80% of startup founders spent less than an hour
negotiating their equity split according to Noam Wasserman, author of “The Founder’s Dilemma.”

Fact #5. Startups with Teams Succeed

Startups with 2 or more founders, a balanced team, or who hire skilled employees to distribute work are
more likely to succeed. In fact, single founders take 3.6x longer to reach scale compared to a founding
team of two. Balanced teams also raise 30% more money and have an average of 2.9x more growth.

 

On 17, Apr 2019 with:

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